Duffy Calls Yellen on Leaking FOMC Policies to Medley Global Advisors

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http://www.nasdaq.com/article/fed-ch...20160210-00837

Fed Chief Janet Yellen Spars With Rep. Sean Duffy Over Leaks Documents

February 10, 2016, 01:17:00 PM EDT By Dow Jones Business News


Comment



By Kate Davidson
A Republican lawmaker sparred with Federal Reserve Chairwoman Janet Yellen over access to sealed transcripts of Fed policy meetings that may shed light on an investigation into a 2012 leak of sensitive central-bank information.
Rep. Sean Duffy (R., Wis.), chairman of the House Financial Services oversight subcommittee, said the panel had asked for excerpts of transcripts of meetings of the Federal Open Market Committee relating to the disclosure of deliberations that occurred at the FOMC'sSeptember 2012 meeting.
"This is not market-moving stuff," he countered. "This is about the investigation and a conversation of a leak inside of your organization. This institution is entitled to those documents--would you agree?" Mr. Duffy said.
"I will get back to you with a formal answer," Ms. Yellen said, as Mr. Duffy tried to interject. "I believe that we have provided you with all of the relevant information."
At issue is the Fed's review of an October 2012 report by Medley Global Advisors, a policy intelligence service, to its clients with potentially market-moving details about internal central-bank policy discussions. The Fed investigation found no major breaches of its communications policies.
The tense exchange on Wednesday highlights a long-simmering battle between House Republicans and the central bank over the 2012 Fed leak. The committee subpoenaed the Fed last year for documents relating to the Fed's internal investigation of the leak. After months of back and forth, Ms. Yellen said last year the central bank had fully complied with the subpoena.
Ms. Yellen said she had expressed her concerns to Rep. Jeb Hensarling (R., Texas), chairman of the House Financial Services Committee, about releasing transcript excerpts, but hadn't received a response until late Tuesday night.
Mr. Duffy countered that he had asked for these particular documents more than a year ago. "You knew I was going to ask you about this today, " he argued.

Minutes of the FOMC meetings are released within three weeks, but the transcripts are released after five years.
Mr. Duffy pressed Ms. Yellen to explain what legal argument she would use to reject Congress's request. "If this were market-moving I would be sensitive to that," he said. "This is not about monetary policy decisions. This is about the internal workings of the Fed.

DUFFY: We sent a letter in the Medley investigation, in our oversight of the Fed, asking you for information regarding communication. No compliance. Then we sent you a subpoena in May, you did not comply with that.


We had partial compliance in October. We're now a year after my initial letter. I've asked you for excerpts of the FOMC transcripts in regard to the discussion -- in regard to the internal investigation on Medley. You have not provided those to me. Is it your intent today to promise that I will have those, if not this afternoon, tomorrow?

YELLEN: Well, congressman, I discussed this matter with Chairman Hensarling and indicated we have some concern about providing these transcripts... given their importance in monetary policy.


DUFFY: So let me just...

YELLEN: And I received a note back from Chairman Hensarling last night, quite late, indicating your response to that. And we will consider it and get back to you as soon as we can.

DUFFY: Oh no, no. I don't want you to consider it and I think the chairman would agree with me, that this is a conversation, not about monetary policy. This is not market-moving stuff. This is about the investigation and the conversation of a leak inside of your organization. So this institution is entitled to those documents, wouldn't you agree?

YELLEN: I will get back to you with the formal answer.

DUFFY: No, no, listen.

YELLEN: I believe that we have provided you with all the relevant information.

DUFFY: That's not my question for you Chair Yellen. If I'm not entitled to it, can you give me the privilege that you're going exert that's going to let me know why I'm not entitled to those documents?

YELLEN: I said we received well after the close of business yesterday a letter explaining your reasoning and I will need some time to discuss this matter with my staff.

DUFFY: I don't want -- listen. I sent you a letter a year ago on February 5th. I had to send you a subpoena. You knew that I'm looking for these documents, you knew I was going to ask you about this today. So if you're not going to give me the documents, exert your privilege, tell me your legal authority, why you're not going to provide this to us.

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